Increased Contribution by CSN into the Merger, Strengthening the Balance

Sheet;

Ability for Wheeling-Pittsburgh Shareholders to Participate Further in

Upside Potential of Combined Company;

Higher Cash Value for Depositary "B" Shares

SAO PAOLO, Brazil, Nov. 14 /PRNewswire-FirstCall/ -- Companhia
Siderurgica Nacional ("CSN") (NYSE: SID) today sent a letter to the Board
of Directors of Wheeling-Pittsburgh Corporation (Nasdaq: WPSC) containing a
substantially enhanced offer to Wheeling-Pittsburgh shareholders as they
consider the pending merger of Wheeling-Pittsburgh with CSN's North
American assets.
Specifically, the letter outlines the following:
* As consideration for CSN's 49.5% interest in the combined company (the
"Company"), CSN will contribute an incremental $50 million of cash to
Wheeling-Pittsburgh, in addition to the contribution of: CSN LLC; the
Slab Supply Agreement, that provides very favorable working capital
terms and credit to Wheeling-Pittsburgh; the Exclusivity Agreement, that
provides Wheeling-Pittsburgh exclusive marketing rights in North America
for CSN products; and the Technology Sharing Agreement;
* CSN will increase the value of the depositary "B" share to $32 from $30,
which CSN will be required to redeem in four years;
* CSN will reduce the Company's Convertible Debt to $175 million; and
* CSN would seek to commit the Company to a rights offering one year
after-closing of the merger so that non-CSN shareholders would have the
option to purchase up to 4.6 million shares (equal to half of shares
underlying Convertible Debt) at the Convertible Debt strike price
The revised offer follows continued conversations with major Wheeling-
Pittsburgh shareholders, and is responsive to their diverse aims and
objectives. This offer:
* Improves the economic consideration to the underlying merger, which
responds to questions regarding the appropriateness of the value of
CSN's assets being contributed;
* Increases the "cash" component by raising the value of the depository
"B" share to $32, and represents $24.41 in present value assuming a 7%
yield-to-maturity, which implies a 34% premium to the closing price of
$18.24 as of November 13, 2006. As an expression of its confidence in
the benefits of the merger, CSN will take the risk that if it is unable
to resolve any successorship issues with the USW, it will commit to sell
shares in order to remain below 50% of ownership while purchasing the B
shares;
* Strengthens the balance sheet, by increasing the equity contribution by
$50 million cash and reducing the Convertible Debt by $50 million;
* Retains the merger structure that provides shareholders freedom of
choice to take either "B" share cash or equity upside, which is in
response to significant shareholder interest in continuing its equity
participation;
* Improves shareholders' ability to participate further in future upside,
through a rights offering at the end of the first year following
completion of the merger; and
* Provides current Wheeling-Pittsburg shareholders with the ability to
maintain control equal to their 50.5% through the combined company's
merger consideration and rights offering
Marcos Lutz, managing director for infrastructure and energy for CSN,
said "This is a winning proposition for all Wheeling-Pittsburgh
shareholders. We believe we have addressed each aspect of offer, and have
improved each component significantly. Wheeling-Pittsburg shareholders will
have more hard value, more options, more control and a stronger combined
company. We continue to strongly believe that the proposed combination of
our North American assets with Wheeling-Pittsburgh provides significant
value creation, and this enhanced offer provides further benefits to
Wheeling-Pittsburgh shareholders."
"With the annual meeting of shareholders at the end of this week, it is
now time for Wheeling-Pittsburgh shareholders to decide. Shareholders can
choose to accept this transaction, if the current directors are
re-elected," concluded Mr. Lutz.
Further, John Hastings, Managing Director of RBC Dain Rauscher, the
agent bank for Wheeling-Pittsburgh's federally guaranteed loan said, "We
welcome improvements to Wheeling-Pittsburgh's balance sheet, and enhancing
the credit worthiness of Wheeling-Pittsburgh will be viewed as a positive
by the banking group. The capital contribution contemplated by this revised
proposal appears to meet those goals."
Under the original Agreement and Plan of Merger previously announced on
October 24, 2006, the parties agreed to merge Wheeling-Pittsburgh with a
subsidiary of CSN, as a result of which the Wheeling-Pittsburgh
shareholders are to receive 50.5% of the combined company and CSN the
remaining 49.5%. CSN had also agreed to contribute $225 million in cash
through the issuance by the combined company of a convertible debt
security.
On November 6, 2006, the companies announced an enhanced proposal,
under which for each share of Wheeling-Pittsburgh, shareholders will have
the choice of electing to receive either i) a share of common stock in the
new combined company ("A Share"); ii) a Depositary Share that requires CSN
to pay $30 per share in cash four years after the merger ("B Share"); or
iii) a combination of A and B Shares. Each B share will represent the same
class of common stock as the A Share that is deposited with a depositary
and will be subject to a mandatory purchase by CSN for $30 per share on the
4th anniversary of the merger. The total number of B Shares will be limited
to 50 percent of the total of A and B shares issued in the merger. The B
shares will be listed for trading on the NASDAQ. CSN and the Company are in
discussions to finalize the enhancement, subject to an amendment of the
existing definitive agreements.
The CSN Letter and term sheet of the enhanced offer follow:
COMPANHIA SIDERURGICA NACIONAL
Av. Brigadeiro Faria Lima, 3400 - 20 degrees Andar
04538-132 - Itaim Bibi - Sao Paulo - SP - Brasil
November 13, 2006
Board of Directors
Wheeling-Pittsburg Corporation
1134 Market Street
Wheeling, West Virginia 26003
Members of the Board:
We want to express our continuing enthusiasm for creating a new
Wheeling- Pittsburgh Corporation that will be financially stronger, and
strategically better positioned. We remain committed to this transaction
which we believe not only revitalizes Wheeling-Pittsburgh Corporation
("WPC") but also delivers value and growth for its stockholders.
We have met with many of WPC's stockholders during the past few weeks
and understand that they have differing interests and investment
objectives. In order to better address these varying interests, we have
enhanced our proposal of November 4, 2006 and hereby submit this revised
proposal with respect to the consideration payable to the stockholders of
WPC in the merger contemplated by the Agreement and Plan of Merger, dated
as of October 24, 2005 (the "Merger Agreement"), by and among Companhia
Siderurgica Nacional ("CSN"), CSN Holdings Corp., CSN Acquisition Corp. and
WPC. The terms of our revised proposal are set forth in that attached
non-binding term sheet.
Our revised proposal offers WPC stockholders:
* the right to receive $32 per share from CSN in 4 years
* the opportunity to invest in the future of the company through a rights
offering a year after the merger at $19 per share
* a company with a stronger balance sheet with CSN's cash capital
contribution of $50 million as part of the merger
We believe that our revised proposal demonstrates CSN's commitment to
WPC, a commitment that can only benefit all of WPC's stockholders and
employees in the long term as compared to the precarious financial future
that would result from any combination with Esmark.
Our proposal is subject to negotiation and execution of definitive
agreements. We are prepared to meet with you and your advisors to negotiate
and finalize documentation immediately upon acceptance of our proposal by
WPC's Board of Directors.
Very truly yours,
COMPANHIA SIDERURGICA NACIONAL
/s/ Benjamin Steinbruch
Name: Benjamin Steinbruch
Title: CEO and Chairman
Non-Binding Term Sheet
Enhanced Cash Elective Structure
Current Merger Agreement
On October 24, 2006, Companhia Siderurgica Nacional ("CSN"), CSN
Holdings Corp. ("CSN Holdings"), an indirect, wholly owned subsidiary of
CSN, CSN Acquisition Corp. ("Merger Sub"), a wholly owned subsidiary of CSN
Holdings, and Wheeling-Pittsburgh Corporation ("WPC") entered into an
Agreement and Plan of Merger (the "Merger Agreement"). The Merger Agreement
provides for the merger of WPC with and into Merger Sub (the "Merger"),
with WPC stockholders receiving 50.5% of the outstanding Common Stock of
CSN Holdings and CSN owning the remaining 49.5% of outstanding Common Stock
of CSN Holdings. CSN Holdings will be renamed Wheeling-Pittsburgh
Corporation ("New WPC") upon the consummation of the Merger. The Merger
Agreement also contemplates that at the closing of the Merger, CSN will
lend $225 million in cash in exchange for the issuance by New WPC and
certain of its subsidiaries of a convertible debt security (the
"Convertible Notes") that would be convertible into shares of Common Stock
of New WPC within three years, provided that such additional ownership of
equity is not prohibited under the terms of the collective bargaining
agreement (the "CBA") then in place between New WPC and the United
Steelworkers. Upon conversion of the Convertible Note, CSN's ownership of
the outstanding stock of New WPC (the "New WPC Common Stock") would
increase to 64%.
Enhanced Proposal
Under the enhanced offer, CSN will make a cash contribution to New WPC
of $50 million (the "Cash Contribution") as part of the Merger. The amount
of CSN's loan will be reduced from $225 million to $175 million in cash and
the Convertible Note upon conversion would increase CSN's ownership of New
WPC Common Stock to approximately 60.5%. Accordingly, the aggregate amount
of the Cash Contribution and the loan by CSN will remain at $225 million.
These changes would be reflected in an amendment to the Merger Agreement
and a revised version of the agreed-upon form of the Note Purchase
Agreement.
In addition, CSN proposes to provide to WPC stockholders an elective
right (i) to receive New WPC Common Stock ("A Shares") and/or (ii) to sell
to CSN a portion of the New WPC Common Stock to be received in the Merger
in exchange for $32 per share, in cash, payable four years following the
Merger (the "B Shares"). Furthermore, New WPC will commit to have a rights
offering (the "Rights Offering") one year following the closing of the
Merger Agreement. Under the Rights Offering, holders of A Shares, other
than CSN, will have the option to purchase their pro-rata portion of
4,600,000 additional A Shares at a price of approximately $19 per share.
The participants in the Rights Offering will also have the option to
purchase on a pro-rata basis the unsubscribed additional A Shares. The
proceeds from the Rights Offering would be applied to reduce the amount of
indebtedness outstanding under the Convertible Note. If the Rights Offering
is fully subscribed, the net proceeds would reduce the principal amount of
the Convertible Note by approximately $87.5 million, which upon conversion
would reduce CSN's interest to its original 49.5% level.
The details of the cash elective structure with respect to the B Shares
are set forth below, which would be reflected in an amendment to the Merger
Agreement. Certain changes would also be made to the agreed-upon form of
Stockholders' Agreement and Registration Rights Agreement to be entered
into by CSN and New WPC at the closing of the Merger, as described below.
The details of the Rights Offering are also set forth below.
Merger Structure Existing Merger structure, in which WPC will merge
with and into Merger Sub, with WPC stockholders
receiving 50.5% of the outstanding Common Stock of
New WPC and CSN owning the remaining 49.5%.
Election by WPC In the Merger, WPC stockholders can elect (the
Stockholders to "Call Election") at the time of the Merger to have
Receive Cash in the shares of New WPC Common Stock they receive in
the Future the Merger be subject to a mandatory purchase by
CSN (the "Call") for $32 per share (the "Call
Price") on the 4th anniversary of the Merger (the
"Call Date"), provided that the aggregate number
of shares of New WPC Common Stock subject to the
Call will not exceed 50% of the total number of
shares of New WPC Common Stock issued to WPC
stockholders in the Merger, provided, further,
that the aggregate value of the Call does not
exceed 60% of the total value of the consideration
issued to WPC stockholders in the Merger.(1) To
the extent that WPC stockholders exercise the Call
Election in excess of the foregoing 50%
limitation, it would be subject to pro-ration.
Depositary Shares All shares of New WPC Common Stock which are
subject to the Call will be deposited with a
Depositary (the "Deposited Common Stock")
immediately upon issuance in the Merger and the
WPC stockholders who have made the Call Election
will receive depositary shares (the "Depositary
Shares") representing their interest in the
Deposited Common Stock and CSN's Call obligation.
The Depositary Shares will be listed on NASDAQ.
CSN's Call On the Call Date, CSN will be obligated to
purchase all Deposited Common Stock and deposit
funds for such purchase with the Depositary. Upon
the delivery of such funds, the Depositary will
release all Deposited Common Stock to CSN.
The Depositary will cancel all Depositary Shares
immediately following the receipt of the funds
from CSN and the holders of the Depositary Shares
will only be entitled to receive the Call Price in
exchange for their Depositary Shares.
Voting of the Deposited
Common Stock The Depositary will vote all shares of Deposited
Common Stock based on instructions received from
the holders of the Depositary Shares.
Distributions on the
Deposited Common Stock All cash, securities and other property
distributed by New WPC in respect of the
Deposited Common Stock will be held by the
Depositary and be released to CSN upon payment to
the Depositary of the Call Price.
Sale of New WPC
Common Stock by CSN The agreed upon form of Stockholders' Agreement
and Registration Rights Agreement to be entered
into by CSN and New WPC at the time of the Merger
will allow for:
* CSN's ability to sell shares of New WPC Common
Stock for a limited period of time prior to
the Call so that in the event CSN's ownership
of New WPC cannot increase due to the
prohibition under the CBA, its equity
ownership in New WPC will not exceed 49.5%
upon purchase of the Deposited Common Stock
("Pre-Call Sale"); and
* CSN's ability to require New WPC to register
under the Securities Act of 1933, as amended,
such number of shares of New WPC Common Stock
as CSN would be required to sell in the Pre-
Call Sale.
Governance The temporary reduction in CSN's ownership of New
WPC Common Stock resulting from the Pre-Call Sale
will not affect any of CSN's governance rights as
stockholder of New WPC.
SEC Registration The Depositary Shares will trade as a "Unit" with
CSN's Call obligation. CSN will register its Call
obligation on a registration statement on
Form F-3.
Rights Offering Number of Additional Shares: 4,600,000 A Shares
offered
Subscription Price: Approximately $19 per share
Eligible Participants: Holders of A Shares, other
than CSN, can participate in the Rights Offering
and such participants will also have the option to
purchase on a pro-rata basis the unsubscribed
A Shares
Commencement: One year following the closing of
the Merger
Use of Proceeds: All proceeds used to payoff a
portion of the CSN's loan, and the number shares
of New WPC Common Stock that the Convertible Notes
are convertible into would be correspondingly
reduced
The proposal set forth in this non-binding Term Sheet is subject to
negotiation and execution of definitive agreements by the parties with
respect thereto.
(1) It is anticipated that this will be based on the value on the day
before the signing of the amendment to the Merger Agreement and this
assumes that there is no other non-stock consideration in connection
with the Merger for U.S. federal income tax purposes.
About Companhia Siderurgica Nacional
CSN is a leading global steel producer with operations in Latin
America, North America, and Europe. CSN is a fully integrated steel
producer, the largest coated steel producer in Brazil, with current
capacity of 21.5 million tons of iron ore, 5.6 million tons of crude steel,
5.1 million tons of rolled products and 2.9 million tons of coated steel
capacity.
CSN's process is based on the integrated steelworks concept that uses
its own sources of iron ore and electrical power supply. In addition, CSN
controls logistics assets - ports and railways - that enable an extremely
cost efficient and reliable loading and unloading of slabs and ore for deep
sea vessels. This integrated steelworks concept allows CSN to be one of the
most cost competitive steel producers in the world.
CSN has had operations in the United States since 2001 through its
wholly- owned subsidiary CSN LLC (formerly known as Heartland Steel)
located at Terre Haute, Indiana. CSN LLC has an annual production capacity
of 1 million tons of cold-rolled, galvanized and hot rolled products.
CSN shares are traded on the New York (NYSE) and S�o Paulo (BOVESPA)
stock exchanges.
Forward-Looking Statements Cautionary Language
The information contained in this news release and the investor
presentation, other than historical information, consists of forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. In particular, statements containing
estimates or projections of future operating or financial performance are not
historical facts, and only represent a belief based on various assumptions,
all of which are inherently uncertain. Forward-looking statements reflect the
current views of management and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
described in such statements. These risks and uncertainties include, among
others,
factors relating to (1) the risk that the businesses of CSN Holdings Corp. and
Wheeling-Pittsburgh will not be integrated successfully or such integration
may be more difficult, time-consuming or costly than expected; (2) the ability
of CSN, CSN Holdings Corp. and Wheeling-Pittsburgh to realize the expected
benefits from the proposed strategic alliance, including expected operating
efficiencies, synergies, cost savings and increased productivity, and the
timing of realization of any such expected benefits; (3) lower than expected
operating results for Wheeling-Pittsburgh
for the remainder of 2006 or for the strategic alliance; (4) the risk of
unexpected consequences resulting from the strategic alliance; (5) the risk of
labor disputes, including as a result of the proposed strategic alliance or
the failure to reach a satisfactory collective bargaining with the production
employees; (6) the ability of the strategic alliance to operate successfully
within a highly cyclical industry; (7) the extent and timing of the entry of
additional competition in the markets in which the strategic alliance will
operate; (8) the risk of decreasing prices for the strategic alliance's
products; (9) the risk of significant supply shortages and increases in the
cost of raw materials, especially carbon slab supply, and the impact of rising
natural gas prices; (10) rising worldwide transportation costs due to
historically high and volatile oil prices; (11) the ability of the strategic
alliance to complete, and the cost and timing of, capital improvement
projects, including upgrade and expansion of Wheeling-Pittsburgh's hot strip
mill and construction of an additional galvanizing line; (12) increased
competition from substitute materials, such as aluminum; (13) changes in
environmental and other laws and regulations to which the strategic alliance
are subject; (14) adverse changes in interest rates and other financial market
conditions; (15) failure of the convertible financing proposed to be provided
by CSN to be converted to equity; (16) changes in United States trade policy
and governmental actions with respect to imports, particularly with respect to
restrictions or tariffs on the importation of carbons slabs; and (17)
political, legal and economic conditions and developments in the United States
and in foreign countries in which the strategic alliance will operate. There
is no guarantee that the expected events, trends or results will actually
occur. The statements are based on many assumptions and factors, and any
changes in such assumptions or factors could cause actual results to differ
materially from current expectations. CSN, CSN Holdings Corp. and Wheeling-
Pittsburgh assume no duty to update forward-looking statements. Reference is
made to a more complete discussion of forward-looking statements and
applicable risks contained in CSN's and Wheeling-Pittsburgh's filings with the
SEC.
Contact Information:
Investors: Jose Marcos Treiger, Investors Relations Manager,
+55-11-3049-7511
Media (U.S.): Jeremy Fielding or Laura Walters, Kekst and Company,
+1-212-521-4800